By Chris Ochayi

ABUJA— The Nigerian Electricity Regulatory Commission, NERC, yesterday, issued a threat for cancellation of licences of 27 power generation companies over failures to meet the terms and conditions for their licences.

To this ends, the NERC, after completion of an audit exercise of its licensees, asked the affected companies to within the next 30 days provide justification why their licences should not be cancelled.

The notice for cancellation of licensees posted on the commission’s website, was sequel to the discovery through an audit exercise that the affected firms could not meet the terms and conditions for their licences.

The regulatory agency explained further: “Most of the affected firms may be sanctioned for their failure to meet their milestones or commissioned their power plants within three years of being licensed.”

Contained in the notice are 63 generation and distribution companies rated as category one. They are in operations and have no issue with the commission. Forty other firms in categories one to four will, however, have to justify their continued ownership of their licences or get it withdrawn within the next 30 days to 12 months.

In category two are those licensees that have ceased operations. These are CET Power Projects being promoted by West African Portland Cement Company, Ewekoro, Ogun State and Contour Global Solutions of Nigeria Bottling Company of Apapa, Lagos State.

The commission in its notice is to immediately “start the process of cancellation of these licences in line with clause 17 of the Electric Power Sector Reform Act of 2005” which listed five conditions for cancellation of licences.

Thirteen other power generation firms in category three are “not in operations but have substantially satisfied their milestones.” These are Ethiope Energy; Supertek Nigeria; Mabon Energy; Bresson AS; Hudson Power; Knox J & L; Tower Power, Abeokuta; Zuma Energy Nigeria transferred to Itobe Coal 1, 2, 3 and 4 firms

Others in this category are MBH Power; Delta Electric Power; Wedotebary Nigeria; Century Power Generation and Supertek Electric.

Those in this category will “be required to satisfy their outstanding milestones and start construction within the next 12 months, failure which the commission will commence the process for withdrawal of their licences in line with clause 18 of the NERC Application for Licences (Generation, Transmission, System Operations, Distribution and Trading) Regulations, 2009.”

In the fourth category are five power generation firms that “are not in operations and have not substantially satisfied their milestones.” They have 30 days to convince the Commission against withdrawal of their licences. In this category are ICS Power; Anita Energy; Ibafo Power Station; Minaj Holdings and Gateway Electricity.

There are other 19 electricity generation firms in category five that are “not in operation and are not submitting quarterly reports to the Commission.” They would be required to, within 30ays provide justification for their licences or get it revoked.

The Commission in its notice said “Licensee listed in categories two are hereby notified of the intention of the Commission to commence the process for the cancellation of their licences on the grounds that the licensees have ceased operations.”

Those in categories four and five were “notified of the intention of the Commission to commence the process for the withdrawal of their licences on the grounds that these companies have failed to commission their licensed generating power station within three years from the date of their licences.”

Licensees in categories two would only be notified of the Commission’s intention to cancel their licences, while those in categories four and five have 30 days moratorium to convince the Commission against the withdrawal of their licences. Firms in category three have 12 months moratorium to start construction.

Clause 18 of the NERC Application for licencees (Generation, Transmission, System Operations, Distribution and Trading) Regulations 2009 stipulates six conditions for withdrawal of a licence which include “misrepresentation or non-disclosure of material fact.”

Other conditions are “wilful or unreasonable contravention provisions of the Electric Power Sector Reform Act 2005 and other regulations governing the industry; failure to comply with milestones; contravention of licensing conditions; insolvency or bankruptcy and failure to commission licensed generation station within three years.”